O'Farrell reacts to corruption probe

IAN MACDONALD'S controversial trip to Dubai was organised by a company owned by the country's ruler, Mohammed bin Rashid Al Maktoum, shortly after the disgraced former NSW minister made decisions benefiting the sheikh, who breeds racehorses in the Hunter Valley.

However, key details of the trip - including emails between Mr Macdonald's staff and the sheikh's company - are being kept secret by the NSW government.

The Premier, Kristina Keneally, refused to make key documents public and the head of the Department of Premier and Cabinet, Brendan O'Reilly, referred the report of his investigation to the Independent Commission Against Corruption.

Sheikh Mohammed bin Rashid Al Maktoum and Ian MacDonald.

The report, released yesterday, finds Mr Macdonald and his deputy chief of staff, Jamie Gibson, spent almost $20,000 of taxpayer funds on airfares, meals and accommodation at the Le Royal Meridien Beach Resort and Spa in Dubai, also owned by the sheikh, against the orders of the then premier, Morris Iemma.

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It highlights a mysterious expense of $1594.67 charged to the hotel by Mr Gibson, for which he cannot account, and raises questions about an extra room booked by Mr Macdonald ''for no specific purpose''.

The report was ordered by Ms Keneally after the Herald revealed Mr Macdonald, his wife and two friends were given upgrades on Emirates Airlines, also owned by the sheikh, shortly after Mr Macdonald made a decision to allow racehorse breeding to continue in NSW during the 2007 equine influenza outbreak. The Herald also revealed that the upgrades were requested by members of the Hunter Valley thoroughbred community.

Among emails provided to investigators by Mr Gibson are some ''which appear to indicate'' Mr Macdonald's itinerary was organised through an employee of the Darley organisation, Emma Ridley.

Ms Ridley also organised hotel bookings for the visit, using details of Mr Gibson's personal Visa card. When she was asked to provide the card's expiry date, Ms Ridley opted to confirm the reservations against Darley's ''credit facility''. However, the facility was never charged.

The report concluded that Mr Macdonald - who quit Parliament this week over the affair - charged the taxpayer $2815.50 for his flight to Dubai without the authorisation of Mr Iemma. He also improperly spent thousands of dollars on meals for his wife, Anita Gylseth, a colleague, Nick Papallo, and his unnamed wife, and Mr Macdonald's daughter, Sacha.

However, Mr Macdonald told investigators he did not know the flight had been booked through the government travel company. This was backed up by his secretary, Selina Rainger, who said he had not asked her to charge the flight to the government.

Mr Gibson told investigators he believed he was given permission by Mr Iemma to travel to Dubai at taxpayers' expense. The report finds Mr Gibson ''had some grounds for his belief'' - information provided to him by Adam Badenoch, Mr Macdonald's then chief of staff who recalled a letter authorising the flight.

However, Mr Iemma told investigators he had no recollection of the letter and it could not be found.

Tabling the report in Parliament yesterday, Ms Keneally said Mr Macdonald's resignation had been appropriate. ''Given the findings of the … report it was the proper course of action. Ian Macdonald would have had no option but to resign.''

She said the Department of Premier and Cabinet would review Mr Gibson's actions and would take disciplinary action if required.

Ms Keneally said attachments to the report would not be released publicly. ''They are being reviewed by the ICAC and contain personal and private information of both public officials and private citizens.

Last night, Mr Macdonald told Channel Nine that he was a victim of ''self-destructive'' leaks within the Labor Party.

He told the Herald: ''I have a clear conscience.''

He said the trip was ''worthwhile'' and any expenses outside of ministerial guidelines were taken mistakenly.

He has repaid the cost of the flight and a portion of the cost of the meals.

Darley said in a statement today: "Darley rejects all suggestions in the Australian media of impropriety regarding its actions relating to former Minister Ian Macdonald’s travel to Dubai in January 2008. Darley acts with the highest integrity at all times. Darley will cooperate with any official inquiry in relation to this matter."